Nonresident Aliens use Form 1040NR or 1040NR-EZ to report only income that is sourced in the United States, or that is effectively connected with a United States trade or business.

If you are temporarily present in the United States as a non-immigrant under an “F,” “J,” “M,” or “Q” visa, and not otherwise engaged in a trade or business, you are considered to be engaged in a trade or business in the United States if you have taxable income from participation in a scholarship or fellowship described in section 1441(b). The taxable part of any scholarship or fellowship grant that is U.S. source income is treated as effectively connected with a trade or business in the United States.

Nonresident Aliens who receive interest income from deposits with a U.S. bank, savings & loan institution, credit union, or insurance company, or who receive Portfolio Interest are exempt from taxation on such interest income as long as such interest income is not effectively connected with a United States trade or business.

Dual Status Aliens report their entire worldwide income for that portion of the year in which they are Resident Aliens, and report only income that is sourced in the United States or that is effectively connected with a U.S. trade or business for that portion of the year in which they are Nonresident Aliens.

Dual Status Aliens report their interest income from all sources for that portion of the year in which they are Resident Aliens, and do not report interest income from deposits with U.S. banks, savings & loan institutions, credit unions, on amounts held by an insurance companies, and investments which generate portfolio interest for that portion of the year in which they are Nonresident Aliens as long as such interest income is not effectively connected with a U.S. trade or business.

Gambling Winnings

In general, nonresident aliens are subject to the 30% tax on the gross proceeds from gambling won in the United States if that income is not effectively connected with a U.S. trade or business and is not exempted by treaty. However, no tax is imposed on nonbusiness gambling income a nonresident alien wins playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States.